Workers bypassing purchase policies

MichaelPaige

LOS ANGELES (MarketWatch) -- U.S. workers are spending more time arranging business services, and are more likely than not to ignore corporate policies that govern the procurement of travel itineraries and package shipping, according to a recent study.

A study commissioned by privately held Web-based services provider Rearden Commerce revealed that more than 40% of office workers surveyed said that they now spend more time researching and arranging business services than five years ago, despite the proliferation of offerings and information via the Internet.

On average, employees visit more than four Web sites to research things like prices, schedules and other options.

What's more, the overwhelming majority of workers doesn't have a problem maneuvering outside corporate policies that govern what vendors they're allowed to use, the study showed.

Of the 87% of employees that said they were aware of their firm's preferred suppliers, only 38% said they consistently turned to those vendors when purchasing services.

But ignoring company purchasing policies might mean more than just breaking the rules -- it could end up costing companies big.

"What most employees do not realize is that corporate rebates and incentives are enacted when the employee population reaches thresholds outlined in their vendor contracts," according to Jeff Pulver, a vice president at San Mateo, Calif.-based Rearden.

That means that while a corporate traveler may think the cost of an airline ticket is $500, in the long run it may actually cost his or her employer much less.

"In most cases, preferred supplier contracts contain volume commitments that, if not met, could jeopardize the entire contract and cost the company millions in lost discounts based on nonperformance," Pulver said. "This is precisely why compliance with preferred vendors and contracted rates is critical."

The study was carried out late last year among workers at U.S. companies with yearly revenue of $100 million or more. Lieberman Research conducted the survey on behalf of Rearden.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.